Australia’s Gladstone fails to clear coal ship queue

The ship queue outside Australia’s 102mn t/yr Gladstone port in Queensland remains stubbornly high, as shipments remained depressed in January and the port increases its reliance on Japanese, Indian and South Korean buyers.

Gladstone shipped 5.43mn t of coal in January, down from 5.91mn t in December, from 5.87mn t in January 2021 and a high of 6.68mn t in June 2021, according to data from Gladstone Ports (GPCL). This was the fifth month in a row that Gladstone shipped less than 6mn t/month, and was the weakest January since 2018.

January is usually a strong shipping month, as producers send shipments that missed the end of the calendar year. Heavy rainfall associated with the La Nina weather pattern has disrupted some mining operations and logistics, as has increased workforce absenteeism associated with the first major wave of Covid-19 infections in Queensland. While the rate of infection is easing in the neighboring state of New South Wales, it has not yet peaked in Queensland.

The ship queue waiting outside Gladstone stood at 36 today, which is in line with a month ago, but is still almost double the average of around 20 coal vessels. Nine ships anchored off the port have a longer than two-week wait for sailing, while others are being turned around in a couple of days, which implies that some vessels are waiting for cargoes that have not yet been assembled at the port because of problems at the mine sites.

January shipments to Japan and India increased during the month compared with December, but this was offset by lower volumes to South Korea. These three nations took 79pc of the exports from Gladstone in 2021, up from 65pc in 2020 and 69pc in 2019, after Beijing imposed its informal ban on Australian coal imports. There were no shipments to China for a 15th consecutive month. There were exports to Brazil, Chile, Indonesia, the Philippines, the Netherlands, Hong Kong and Malaysia, as producers look to diversify sales geographically.

The port shipped to 13 destinations in January, up from 10 in December, according to the GPCL port data.

Premium hard coking coal prices more than trebled from early May 2021 to exceed $400/t fob Australia in mid-September before easing until late November and then rising again to set new record highs in January. Argus last assessed the premium hard low-volatile coking coal price at $446.45/t fob Australia on 4 February, up from $381.65/t 12 January.

Thermal coal prices eased from record highs in mid-October but have risen again in the past month to hit new highs in late January. Argus last assessed the high-grade 6,000 kcal/kg NAR thermal coal price at $246.45/t fob Newcastle on 4 February, up from $192.60/t on 7 January, but down from $260.82/t on 28 January.

Hard coking coal typically accounts for around a third of Gladstone’s total exports, with lower-grade coking coal and thermal coal each accounting for a third.